Tag Archives: Rule 8

This case was before the court on Plaintiff’s motion to strike several affirmative defenses pled by Defendant as factually insufficient under FRCP 8 and Twombly. Significantly, the court struck Defendant’s two affirmative defenses asserting that liquidated damages were not due to Plaintiff because Defendant had acted in “good faith” in committing violations, if any, of the FLSA. The case is significant, because the affirmative defenses struck are asserted in the majority of FLSA defendants’ answers, typically with identical language to that pled here. Noting that such bare bones allegations do not satisfy the pleading requirements of Rule 8, the court struck the Defendant’s affirmative defense(s) of good faith, with leave to replead with additional facts.

Holding that the Defendant’s allegations of good faith were insufficient as pled, the court explained:

“[Defendant’s] Third and Fifth Affirmative Defenses respectively claim that Plaintiff’s claims are barred because Haskell has acted in good faith, and because of the existence of exceptions, exclusions, or exemptions provided in the FLSA. (Doc. 6 at 6). These affirmative defenses correctly state that a “good faith” defense and exceptions exist under the FLSA. See29 U.S.C. §§ 207, 260. However, the affirmative defenses, as drafted, are lacking in sufficient details and fail to provide the requisite notice of the theory of the defense. See Twombly, 550 U.S. at 556 (explaining the need for factual support to give defendant fair notice of claims, but equally applicable to defenses). The requirement to include factual support to provide fair notice of claims is also applicable to affirmative defenses. Therefore, if Haskell intends to pursue these defenses it will need to plead some factual basis to give the Plaintiff fair notice of its defense. Therefore, Plaintiff’s Motion is granted as to the Third and Fifth Affirmative Defenses and those defenses are stricken with leave to amend.”

As the trend of defendants filing more and more motions to dismiss based on Twombly continues, it will be interesting to see if we begin seeing an uptick in motions like this, which seek to apply the pleading standards equally to the other side of the “v.”

In this case, the Plaintiffs pled Civil RICO in addition to typical FLSA violations, and other relatively unique claims under the Sherman Act and the Donnelly Act. Specifically, the Plaintiffs claimed that the Defendants regularly paid substandard wages, and the practice resulted from their employment of undocumented immigrants in violation of federal laws. In dismissing the portion of Plaintiffs’ claims pertaining to Civil RICO, the Court found that the Plaintiffs had not properly alleged proximate cause of Defendants’ pattern of criminal activity and their damages due to wage violations.

“In evaluating whether the plaintiffs have adequately alleged proximate cause in this case, the Court focuses on the proposed amended complaint, because it adequately alleges the commission of a pattern of racketeering activity, to wit: two or more violations of the harboring statute. The question to be answered is whether the plaintiffs’ injury-the depression of their wages-was proximately cause by defendants’ hiding their illegal alien employees from the Government. The answer to that question is no.

There is no direct relationship between the harboring of illegal aliens and the plaintiffs’ depressed wages. Indeed, plaintiffs do not so allege. Rather, they contend that they were paid below-market wages because the defendants knowingly hired undocumented workers, who would and did work for wages that were lower than the prevailing rate. That act-the knowing hiring of illegal aliens-is specifically alleged to be the proximate cause of plaintiffs’ lower wages. (Am.Compl.¶¶ 45, 94, 109, 119, 128, 132.) As explained above, that act is not a RICO predicate act.

If plaintiffs had managed to plead that defendants knowingly hired 10 or more illegal aliens who defendants knew had been “brought into” the country-that is, if plaintiffs had successfully pled a violation of section 274(a)(3), which is a RICO predicate act-their proposed amended complaint might well plead proximate cause, as the Second Circuit found in analogous circumstances in Commercial Cleaning, 271 F.3d at 381-385. Of course, Commercial Cleaning is a pre-Anza case, so if plaintiffs had managed to plead that defendants knew some of their illegal employees had been “brought into” the country by others, this Court would have to consider whether Commercial Cleaning remains good law on this point. But plaintiffs’ failure to allege the requisite specific facts moots any such inquiry.

Because hiring illegal aliens without knowing they were “brought in” is not racketeering activity, plaintiffs’ allegation that hiring illegal aliens depressed wages-a correlation long recognized by courts, including the Supreme Court, see, e.g., DeCanas v. Bica, 424 U.S. 351, 356-357 (1976)-does not satisfy the requirement that plaintiffs plead injury caused by a pattern of racketeering activity. To clear that hurdle, plaintiffs need to plead facts tending to show that defendants’ harboring of illegal aliens proximately caused the drop in their wages. This they have not done.

Reading the plaintiffs’ proposed amended complaint in the most favorable light, they do allege that the defendants were able to keep their “scheme” to employ illegal aliens going by hiding the aliens from the Government-by “harboring” them. (See Am. Compl. ¶¶ 25-45, 64, 67-73, 76.) But the fact that harboring may have allowed the alleged injury to persist for a longer period does not mean that harboring caused the injury.

Furthermore, that the only allegation in the amended complaint connecting harboring and wages concerns the duration of the harm rather than its cause underscores another critical point. “The key reasons for requiring direct causation include avoiding unworkable difficulties in ascertaining what amount of the plaintiff’s injury was caused by the defendant’s wrongful action as opposed to other external factors.” First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763, 770 (2d Cir.1994). Any effort to quantify how much of plaintiffs’ depressed wages was caused by the harboring of illegal aliens, as opposed to hiring them or some other factor at work in the marketplace, would be even more inherently speculative than the proceeding anticipated (and condemned) by the Supreme Court in Anza.

Finally, because harboring is a direct affront to the Government, there is no need for private attorneys general like plaintiffs to bring damages actions in order to redress it. Just as the State of New York could be expected to pursue a corporation that was failing to pay state income tax, the Government can be expected to vindicate the laws against hiding aliens from the Government. This is not to say that proximate cause will be lacking every time a governmental entity has an interest in vindicating its laws. Indeed, any such result would effectively wipe the civil RICO statute off the books, since every RICO violation is predicated on a violation of some federal criminal statute-a violation that the United States, a “victim” whenever its laws are violated, has an incentive to remedy. However, in this case, where there is no direct or obvious connection between the racketeering activity alleged (harboring) and the harm to the plaintiffs (depressed wages), the fact that the direct victim of the harboring has the incentive to redress the harm (by capturing and deporting the aliens and by prosecuting the harboring employer) fatally undermines any contention that these plaintiffs have suffered injury by virtue of the alleged racketeering activity.

The amended complaint thus fails to state a claim under 18 U.S.C. § 1962(c). Because plaintiffs fails to plead any RICO violation, they also fail to plead any violation of 18 U.S.C. § 1962(d), the RICO conspiracy statute. All three RICO counts-Counts I, II and III-are dismissed.”